Header bidding is an advanced programmatic bidding technique that is said to be more profitable for publishers and offer a better deal for brands. The basic idea is that it allows publishers to offer ad inventory to multiple ad exchanges at the same time and only then does it call an ad server.
“Header bidding means that instead of a waterfall, it works parallel and approaches different demand-side platforms at the same. This is better for publishers and brands, who both get a better deal,” says Pete Edward, chief strategy officer at Engine Group.
If that sounds confusing, think of it like this. Traditional programmatic works like an auction but there is only one buyer and one seller. In header bidding, all the buyers get to bid at the same time.
Yoav Arnstein, head of audience network for Facebook in EMEA, explains: “I would compare [header bidding] to a Sotheby’s auction. Essentially with header bidding everybody gets to submit a bid at the same time rather than an auction where the first bidder goes in the room with the seller, puts out their best price and if the seller likes it they say yes before hearing any other bids.
“Ultimately it is great news for publishers as it gives them the best possible deal and will encourage more direct and fair programmatic trading with brands.”
Header bidding empowers high-quality publishers to get higher revenues.
Yoav Arnstein, Facebook
Traditional programmatic buying is already complicated and programmatic has been blamed for a number of issues in digital marketing – from brand safety and ad fraud to poor viewability. New figures from Integral Ad Science show that all these issues are made worse when advertising is bought programmatically rather than going direct to publishers.
Given this, anything that makes the ecosystem more complicated would seem to be a bad idea. However, Arnstein says header bidding is a positive.
“With the way ad bidding happens in programmatic advertising currently, publishers are consistently losing margins to third-party middlemen who make the rules and obfuscate the truth.
“Many brands believe in both making premium publishers stronger and creating a safer environment for programmatic, so moving to header bidding achieves this while cutting out the middle men. Header bidding empowers high-quality publishers to get higher revenues and that’s nothing but a positive thing.”
Edwards adds: “Header bidding means that instead of a waterfall, it works parallel and approaches different DSPs at the same. This is better for publishers and brands, who both get a better deal.”
Post-programmatic technology is one of the big emerging developments in programmatic video particularly. It aims to improve the quality of inventory by allowing buyers to ensure what they have bought is up to standard.
It works like this. Currently when an impression is bought, the demand-side platform only gets between eight and 10 pieces of information on the audience before having to make a decision on buying. Only once the ad is served does it get information from the supply-side platform.
With post-bid, the impressions can be interrogated across hundreds of fields of information after the buy, with the opportunity to dump it if it turns out traffic is fraudulent or there are brand safety issues. The whole process takes fractions of a second but it allows the system to decide not to serve the ad if it turns out the impression isn’t good enough.
“[Post-bid] means the advertisers will know if the traffic is being served to a data centre in the Ukraine rather than to human traffic. Or if the viewer is watching with the sound on or off,” says Edwards.
“What that allows the system to do is to make a decision. You can serve the ad, but if it’s not good you send it back to the ad exchange. It means you’re still buying at market rate, but you only end up buying the highest quality – the other stuff is substandard. It’s really smart tech.”
Another way to look at it is like buying a car. You find the make and model you want but can only look at the outside of it. Once you pay you get to look under the hood. If it’s all OK you take it out of the showroom. If not you can reject it and get your money back.
The rise of the DMP in programmatic
Data management platforms (DMP) have been used for some time in display advertising. According to a report by Oracle and Econsultancy, 20% of marketers have used a DMP. However, it is only now that they are now starting to be used in programmatic as well.
DMPs are basically software that brings together data, sorts it and helps to provide insights into what it shows. For marketers and their agencies they’re typically used to help segment audiences and show relevant ads using cookie IDs. In programmatic, they can draw in data from a DSP, ad network and ad exchange to help boost the effectiveness of advertising.
Publishers also use them to get more information on their audiences to improve targeting and, in the long run, profitability.
The idea is that a DMP gives both the brand and the publisher more control. And it can also help them work together to share data, improve targeting and reach more engaged audiences.